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1 1 Public Private Partnership in Health Care in Hong Kong What are the effective strategies? Dr Ben FONG 11 January 2016

2 What are Public Private Partnerships Efficiency Unit of HK Government Public Private Partnerships (PPPs) arrangements where the public and private sectors both bring their complementary skills to a project, with varying levels of involvement and responsibility, for the purpose of providing public services or projects". Public Private Partnerships 8 March 2005 Vicky LEE Research and Library Services Division Legislative Council Secretariat

3 Hong Kong Government policies on private sector involvement involving the private sector in the provision of public facilities and services to: encourage innovation enhance productivity speed up project and service delivery to provide better and more efficient services to increase opportunities for investment in Hong Kong. An Introductory Guide to Public Private Partnerships in August 2003 Public Private Partnerships 8 March 2005 Vicky LEE Research and Library Services Division Legislative Council Secretariat

4 Merits of public private partnerships PPPs can take different forms to meet the specific needs of individual cases. According to EU, merits of PPPs include: (a) allowing the public agency to concentrate on its core competencies; (b) creating economic growth, employment and investment opportunities; (c) realizing better exploitation of public assets, data and intellectual property; (d) reducing lifecycle costs of a project; (e) providing opportunities for new sources of revenue; (f) bearing less risks of cost overruns and project delays; (g) achieving substantial improvement in the quality of public facilities and services; (h) achieving better allocation of risks; (i) spreading the public capital investment over the life of a project; (j) utilizing the skills and experience, access to technology, and innovation of the private sector for better delivery of public services; (k) bringing commercial disciplines into the provision of public services; (l) maintaining a small government and a lean civil service; and (m) enhancing unity of responsibilities for delivering services. Public Private Partnerships 8 March 2005 Vicky LEE Research and Library Services Division Legislative Council Secretariat

5 Demerits of public private partnerships Listed below are potential problems of PPPs as suggested by EU3: (a) loss of public control; (b) inadequate accountability of the private sector entity to the public; (c) unreliable levels of service; (d) lack of flexibility, especially over the longer term; (e) disruption of service, and costs incurred by the public agency when step-in rights are exercised; (f) inappropriate allocation of risks between the public and the private sectors; (g) the private sector entity escaping liability through liquidation and use of the status of a limited liability company; (h) higher costs due to limited competition if qualified PPP contractors are not available; (i) greater difficulty and higher cost in removing an unsatisfactory contractor; (j) higher private financing costs; and (k) greater secrecy and lack of transparency resulting in benefits not being shared with the public agency. Public Private Partnerships 8 March 2005 Vicky LEE Research and Library Services Division Legislative Council Secretariat

6 PPP in HONG KONG only the Build-Operate-Transfer (BOT) approach has been adopted in the development of a few major infrastructures - cross-harbour tunnels and other tunnels. other forms of PPPs, in particular Private Finance Initiative (PFI): (a) Tourism-related projects such as the former Marine Police Headquarters, the Central Police Station, Victoria Prison and the former Central Magistracy and the Tung Chung Cable Car Project;4 (b) Cyberport5; (c) Asia World-Expo (AWE); and (d) West Kowloon Cultural District (WKCD) Public Private Partnerships 8 March 2005 Vicky LEE Research and Library Services Division Legislative Council Secretariat

7 PROMOTING PPP IN HEALTHCARE Benefits of Public Private Partnership brings together the resources and expertise from both the public and private sectors becoming increasingly popular in many advanced economies help redress imbalance between public and private healthcare services an overall improvement in the quality of care for patients better use of the resources available in the community training and sharing of experience and expertise helping to ensure sustainability of the healthcare system

8 PROMOTING PPP IN HEALTHCARE Achieve Savings and Enhance Cost Effectiveness bulk contracts of purchase of services at a lower cost from the private sector - achieve savings and enhance cost effectiveness service contract must set the standards and ensure quality of service public hospitals can focus more on its priority services such as acute cases and the treatment of complex illnesses requiring costly treatment relieve the service demands on public hospitals private sector more room to develop In the case of sharing facilities between co located public and private hospitals, both would achieve cost savings and the patients would enjoy a reduction in fees.

9 PROMOTING PPP IN HEALTHCARE Enable the Optimal Use of Human Resources healthcare human resources costly medical and healthcare professionals take time to train PPP to make fuller use of human resources in the private sector to deliver service for public sector patients private sector doctors to practice in public hospitals on a part time basis - to relieve resources demand and encourage continuing enhancement of service quality in both sectors Your Health Your Life Healthcare Reform Consultation Document 2008

10 PROMOTING PPP IN HEALTHCARE Facilitating Cross Fertilization of Expertise and Experience and Promoting Healthy Competition and Collaboration collaboration and cross fertilization of experience between public and private sector medical professionals skill transfer and cross sector training a more balanced spread of caseload of certain types of hospital services between public and private hospitals would create competition between the two sectors for service quality and standards Eg cataract service pilot scheme for purchase of private sector service

11 PUBLIC PRIVATE PARTNERSHIP IN HEALTHCARE - Possible Models Primary Care to purchase services from the private to partially subsidize patients to undertake preventive care in the private sector to makes use of capacity of private sector part of service demand on the public greater choice of services for individuals in community

12 PUBLIC PRIVATE PARTNERSHIP IN HEALTHCARE - Possible Models Secondary and Tertiary Care in financing, construction of facilities, and service delivery, etc (a) Purchase of hospital service from the private sector: elective procedures (lower cost; waiting list) (b) Hospital development: co location of public and private hospital facilities (co ordinated planning; avoid duplication of equipment and facilities;sharing of supporting services, diagnostic services and facilities) (c) Setting up of multi partite medical centres of excellence: to draw together top expertise of the relevant specialty from both the public and private sectors, including the academia (d) Engaging private sector doctors in public hospitals: particularly in tertiary and specialized services, on a part time basis

13 PROMOTING PPP IN HEALTHCARE Chronic Disease Management Shared Care Programme PPP Pilot Projects and Initiatives a pilot Public Private project - additional choices to chronic disease patients currently under the care of the public healthcare system to have their conditions followed up by private doctors clinically suitable patients identified by a multi disciplinary risk assessment and management programme at special outpatient clinics invitation to participate in the Shared Care Programme Government provides partial subsidy for patients to receive comprehensive management in the community, and supports the establishment of long term partnership between patients and the doctors of their choice programme primarily targets DM and HT patients currently taken care of by the public system piloted by HA in the New Territories East Cluster

21 PROMOTING PPP IN HEALTHCARE ehr Sharing System Public Private Interface-Electronic Patient Record (PPI-ePR) in mid-2005 enhanced the co-ordination of the public and private health service sectors as a way to promote continuity of care of patients, with the aim to facilitate a free flow of patients between the public and private sectors, in providing on time access to patient information

22 PROMOTING PPP IN HEALTHCARE ehr Sharing System a territory-wide patient-oriented system, the ehr Sharing System, was implemented in response to the healthcare reform in 2008, as part of the Public Private Partnership (PPP) initiative (Hospital Authority, 2010)

23 PROMOTING PPP IN HEALTHCARE ehr Sharing System in July 2009, the ehealth Record Office established to monitor the complex and multi-faceted development of her to strengthen the delivery of service in both the public and private sectors ehr is now entering the legislation process on patient privacy and security of ehr (ehealth Record Office, 2014b).

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